Investment Management FAQs

Throwing money at the market is not a plan.  Neither is a "set it and forget it" approach.  How do you make sense of it all?  The headlines, the talking heads, the markets? The keys to successful investment management are access to research, conviction, and financial planning, and we have it all.  Your financial security and your goals are our primary concerns. 

I'm concerned about fees when I invest. What can I expect?

Investment management comes with costs.  Even if you invest in mutual funds, without advice, those funds have what are known as expense ratios.  These expenses are a combination of trading costs for the fund, the salaries of the people managing the funds, the costs of printing statements or offering online portals, and many more basic functions.  There is no free lunch in investing.  If you buy or sell stocks, as an example, you will pay a commission or other transaction cost.  Fees are as inescapable in investment management as they are in other aspects of our lives.

Cost is only an issue in the absence of value.  Consider the investment approach.  Will it help you preserve capital, if that is your goal?  Will it help you achieve returns that are less volatile than the stock market?  Will it provide you access to markets or strategies you wouldn't otherwise be able to invest in?  These are important questions.  But an even more important question is this: Can you figure it all out yourself? Perhaps you can, perhaps not.  While we always seek to minimize fees, we are more focused on solving your current and future financial concerns.  Not doing so could be more costly in the long run.

Why not just index?

In 2002, the S&P 500, the recognized market benchmark, declined 22%.  6 years later, in 2008, the same index declined 37%.  If you owned the S&P 500 index you had a wild rollercoaster ride over the years 2000 through 2009.  The reality is that there is nothing wrong with indexing.  One way to achieve market returns is to own the whole market, or the index you are following.  However, most of our clients like roller coaster rides in amusement parks, not their monthly statements, and most would like to minimize risk, where possible.

While there is never any guarantee that any particular investment strategy will achieve its stated goal, Modern Portfolio Theory has shown that blending different asset classes, also known as diversification, including real estate, commodities, fixed income investments, annuities, and cash, can limit the volatility found in an all stock portfolio.  While this approach may not achieve all of the potential increases in the stock portfolio, it will likely not realize the magnitude of losses in such a portfolio.  In short, simply indexing may not help you achieve your goals, but it will get you invested. We believe in a different approach.